Payment systems typically utilize a payment card (e.g., a conventional credit and debit card). A payment card is generally a piece of plastic material bearing financial information (e.g., credit and debit card numbers) that can be processed to pay for goods or services. Types of payment cards include a credit or debit card, such as those utilizing Visa®, Mastercard®, and American Express® networks. The payment card is issued by a card issuer (e.g., a bank) to a cardholder (e.g., a customer) who uses the card to purchase goods and services.
According to U.S. Patent Application Publication No. 2005/0077350, combination credit/debit cards were developed in the 1990s. To purchase goods or services, a cardholder clerk swipes or otherwise processes the credit/debit card through a point of sale (POS) device (e.g., card reader). The POS device communicates with an open network such as a VISA network.
Financial information obtained from the process is transmitted through the open network and causes a charge to appear either on a credit account or a bank account to pay for the purchased product. Given the pervasiveness of charge cards, credit cards, debit cards, credit/debit cards, and other payment cards, the financial transaction interchange to which charge cards, credit cards, debit cards and credit/debit cards belong can be considered an open network.
U.S. Patent Application Publication No. 2004/0238622 describes that the payment card issuer prefers that the cardholders predominantly use the issuer's payment card (e.g., a credit card) in order to generate the largest amount of fees and revenue. Therefore, the credit card issuer often offers incentives to cardholders who use the issuer's card. The incentives or rewards are accumulated in an account when the cardholder uses the card. The use of incentives benefits the card issuer because the opportunity for the credit card issuer to generate fees and revenue comes with credit card usage. For example, the incentive may be a certain amount of frequent flyer miles, cash, credit towards purchases, points, gifts, etc. These incentives are vigorously promoted by banks and/or card issuing organizations.
Credit and debit cards are being issued by banks and financial institutions in association with other commercial companies or businesses which themselves offer goods and/or services. This phenomena, known as co-branding, provides a credit and/or debit card that often carries a name of the commercial company along with the issuer's name. The commercial company often provides the credit or debit card holder certain benefits which are typically related to the goods or services provided by that commercial company. An example of a co-branded payment card is the General Motors® credit card (Mastercard or Visa) which offers credit card holders 5% of earnings on card purchases toward the purchase or lease of a new General Motors vehicle. The 5% of earnings are accumulated in a rewards account.
Heretofore, payment card rewards have required that the cardholder obtain a payment coupon or certificate once a particular number of reward points were accumulated. Alternatively, other reward programs have required that cardholder call, write and/or otherwise request a certificate or coupon for purchasing a particular product. For example, frequent flyer award programs associated with the credit cards require the cardholder to call the airline and provide a frequent flier number to obtain a ticket based upon frequent flier miles. Other payment card reward systems require that the card holder provides card number information to a web-based redemption site for goods and services in exchange for reward points.
Using coupons, vouchers, gift cards and the like are inconvenient because they require that the customer carry yet another card or papers. Additionally, gift cards, vouchers and coupons require that new codes and account numbers be generated for the transaction. Further, the redeeming store or dealer is inconvenienced by the use of coupons, vouchers, and gift cards because a separate redemption process (separate from the credit card process) is required to authorize the transaction. The separate process requires additional in-store training and separate reimbursement procedures.
U.S. Patent Application Publication No. 2005/0077350 provides a system in which rewards or award points can be redeemed using an automated system. U.S. Publication No. 20051/0077350 discloses a closed network for redeeming award points. However, a closed network requires an additional cost and training for providers of the services.
Thus, there is a need for a payment card system that facilitates easy access to redeeming rewards at participating stores, dealers, outlets or service providers. Further, there is a need for a credit card or debit card system that includes a debit card number (or an additional debit card number) that is operable on existing networks for redeeming reward balances. Yet further, there is a need for an open network for redeeming reward balances. Yet further still, there is a need for a payment card optimized for easy redemption of rewards from the merchant's, card issuer's and/or card user's perspective.